Fitch: Tighter EU Regulations Pose Threat to O&G Company Ratings

Fitch: Tighter EU Regulations Pose Threat to O&G Company Ratings

LONDON -- The serious gas leak on Total SA's (TOT) Elgin field in the North Sea late last month could affect the ratings of oil and gas companies operating in the region if it encourages the European Union to implement tougher regulation, rating agency Fitch Ratings said Tuesday.

The EU is currently considering proposals which would require companies seeking new drilling licenses in the region to prove they have the financial means to pay for any accidental environment damage.

Fitch estimates that the amount any operator in the EU would need to prove is available to obtain an offshore operating permit could amount to EUR10 billion.

The ratings agency said it would probably view any funds earmarked for a financial means test as segregated in its financial calculations.

"Such an approach could have negative rating consequences for even the highest investment-grade oil and gas companies operating in EU territorial waters," it said.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Dave kilpatrick | Apr. 11, 2012
Why is the EU getting involved in the North Sea when it comes under UK Scotland, England & Norway. The next thing we will have the EU demanding TAX from each field time some one told them they are not welcolme.

daniel dominick | Apr. 10, 2012
Brussels maybe bureaucratic buffoons, but I am sure they are not stupid enough to try to cripple our small oil companies financially. These small oil companies are a massive part of the European recovery.

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